cta_decision CTA Case No. 34443444 1985-05-30

CTA Case No. 3444 (Decision)

K.EPUBLIC OP T HE PHil.lPPtNE$ COURT OF TAX APPEALS Q.U&zON CITY ~NSCOR CONTAINER CORPORATION , Petitioner , - versus - C.T.A. CASE NO. 3444 COMMIS SIONER OF INTERNAL REVENUE , Respondent. X- - - - - - - - - - - - - X DE C I S I 0 N In i ts petition for review f iled with th i s Court on April 13 , 1982, petiti oner alleges: 1. That petitioner: Ansoor Container Corporati on i s a dome:stic c:orporation engaged in the manufacture of steel drums and pails with office/fact ory at 18 E. de l os Santos Avenue , Mandaluyong, Metro Manila , while r esponden t is the duly appointed Commissioner of Inter- na l Reven ue�, an a gency of the Government charge with t he duty of enforcing the national i n ternal revenue laws with offices at BIR Bldg . , Di liman, Quezon City , where he may be served with s ummons, writs and other legal pro- cesses; 2 . That on Apri l 14, 1 980, petitioner filed with r esponde:nt its final or annual income tax. return cover h 1g cal endar year ended December 31 , 1979 r eporting a net taxable income of P2 , 253 ,005.00 and a n i ncome tax due of P89 1,202 . 00 . Fr om the said i ncome tax. due and payable , pet i t i one r c~edited a nd/or deducted PL0,77 5. 00 and

DECISION - CTA CASE NO. 34:44: - 2- !1 669 , 314 .0 0 , re:presen ting; ov'erpa id 1 978 i ncome t ax plu s income t axes wi thheld and i ncome tax. payments f or the ,_ fi rst 3 quarte:rs of 1979, r espectively , or a total of !168 0, 089 . 00 , leaving a balance o f !1211,113.00 , which wa s paid on Ap r il 1 4:, 1 980 , hence , a t otal i nc ome tax. pa i d o f !189 1, 20 2 .00; 3 . That on April 1 3 , 198 2, petiti one r filed an ame nd e d i ncome t ax r eturn f o r 1 979 a fter i t disc o ve r ed that its purchases fo r 19 79 were under stated and r eported a corr ected net taxab l e income of only !11 , 761 , 007.0 0 and an i ncome tax due of ii694 , 403;oo . Since i t had previous- ly pa id !110 ,775. 00 and !1880 ; 42 7 .00, or a t ot a l of !1891 , 20 2. 0 0 , t here was an obv ious erroneous and/ or il- l e gal p aymen t o f !1196, 799 . 00 ; 4 . That o n Apri l 13, 1 982 , petiti one r f i led wi th respondent a claim f or r efund of t he afores aid overpa id i ncome tax of ii l96i , 7 99 .. 00 p ai d on April 1 4,, 19 80; a nd 5. Tha t petiti oner ha s insti tuted t h is appeal to pr e serve i ts r i ghts und er Sec:tion 29 2 of t he Revenue Code . Peti tioner therefore asks t hat respondent be ordered to r efund to p e titio ne r t he sum of ~196 , 799.00 r epre- senting alleged er r oneous and/6r illegal payment o f income tax. f o r 19 79 . Exc ept f or p artia l denials of certain a verments in par agraphs 2, 3 , 4 and 5 , allegedly for lac k of (\

� DECISION - CTA CASE NO. 3444: - 3- knowledge or information sufficient to f orm a belief as to the truth thereof , although they ar e� inva r iably within re~ sponde~nt's competency to c:hec:k or ve rify, respondent prac tically admitted i n his answer the aforestated allegations of petitioner. At any rate, when this case wa s heard by the Court, petitioner manifested that since i t s claim for refund was still being administratively processed by t he Bureau of I n- ternal Revenue and this appeal has been instituted to preserve petitione~'s ri gh ts under Section 292d the Revenue Code, i t might be propitious to wa i t for: the find i ngs and recommendation of responde~n t � s off i c:er s concerned . Then during the hearing on May 7, 1985, th e parties s ubm itted this case for decision on t he basis of t he Me:mor:andum for t he Commissioner dated October 2, 1 98 4 o f the: Chief of the Appellate Divisi on , which was con- cur:red in by t he Revenue Service Chief (Legal Office ) '� recommending, for reasons stated therein, that the amount of ~138 , IDI.OO be credited to petitioner Ansco r Con tainer Corporation . (pp. 31 4,- 315 , BIR records .) To put an end t o th is lit igation , petitioner manife�sted i ts willing- ness to accept the tax credit of ~138 , 10 1 . 00 i nstead of i ts or igin al claim of ~196 ,7 99.00 . To q uote the ab6ve- mentioned memorandum for the Commiss i oner: (pp . 31 4.- 315 , BIR records.)

DECISION - CTA CASE NO. 344:4 - 4. - MEMORANDUM FOR: The Commissioner .SUBJECT: This refers to the claim filed on April 13, 1982 by Atty. Demosthenes A. Gadioma, in behalf of his client, ANSCOR CONTAINER CORPORATION, for tax credit of ~196,799.00 as alleged erroneously paid income' tax for 1979 {p. 238) �. FACTS: Taxpayer is a domestic co v.: poration , organized and e xisting under Philippine Laws, and i s engaged in the manufacture of steel drums and pails. Recently, tax- payer disc:ove:r.ed that i ts purchases ac�coun t in 1979 with the National Steel Corporation (NSC) , the principa l sup~lier of its raw materfals in the manuf?cture of its steel drums and pails was understated thereby resulting in the said overpayment of in- c:ome tax for the said year. As claimed by taxpayer's ac:counting personnel, the error or r.econciling i terns were attributable to the breakdown of the company's accounting machines, turn-ower of pe'rsonnel an�d the change of ac:coun ting systeme Based on such rec:onciliation, the 1979 balance of th e liability acc:ouht due National Steel Corporation as of the end of the year , should be ~3 , 48 7,305 . 08 as against the unreconciled balance of only ~2,826,862.83 or a difference of ~660,442 .2 5 wh i ch normally represents the under-record- i ng of its purchases account. Out of such difference, the r�econc:ilia tion statement showed further that t he net amount of only ~353,463.53 constituted the net additional adjustments to the purchase account cover- ing the year 1979 {pls . see doc. on pp . 203- 20 4) e. Taxpayer's payments wer:e verified rem itted to the Bureau {p. 266) ~ ' .u

DECISION - CTA CASE NO. 3444 - 5- FINDINGS AND RECOMMENDATION: The claim is meritorious. Investi- ~ation made by the examiner showed a refundable amount of only �1138,101.00 instead of �1196,799.00 as c:laimed com- puted as follows: Total adjustment for: 1979 � � �1353,463.53 Disallowed adjustment � � � 8, 211.18 Net ��� �1345,252.35 Refundable The or iginal i nvestigation o f the 1979 income and business tax liabilities of said corporation d isclos ed a defic:iency income tax of �1693,901.41, a deficiency withholding tax of �1115 ,677. 81 and deficien~y 3% con- tractor's tax of �186 ,122.91 . The afore- mentioned tax l iabilitie~ were, however , cancelled and settled upon payment and com- pliance by taxpayer of Revenue Memorandum Or der No. 38-83 dated November 14, 1983 (pls. see doc . on pp . 243-244) ~ In view of all the foregoing and as the claim was filed wi thin two (2) years from date of payment of the tax, it "is respect- fully recommended that the amount of �1138,101 . 00 be cr edited to Ansc:or Container Corporation, 18 EDSA , Man daluyong, Metro Manila, pursuant to Section 295 of the Tax Code . Respectfully submitted: (SGD .} EULOGIO H. NATIVIDAD Chief, Appellate Division I CONCUR : (SGD .) REYNOSO B . FLOREZA Rev-enue Service Chief (Legal Office) In view of respondent ' s recognition of the meri- tor iousness of petitioner's claim for refund in the (' )

DECISION - CTA CASE NO . 3444 - 6- amount o f ~138,101 . 0 0, instead of Pl96, 7 99 . 00 as claimed , and willing;ness that such amoun t of ~138,101.00 be credited to petitioner, pur suant to Secti on 295 of the National Internal Revenue Code, and peti- tioner's acceptance thereof , instead of ~196 ,7 99 . 00 as or i ginally claimed by i t, the parties maybe con- sidered to have ente�red i nto a compromise agre e ment to put an end to this appeal thru t_he rendition of a j udgment , as praye d for by them, incorporating such agreemen t or stipulation . (See Republic of the Phil i p pi nes vs . Marcelo B . G~ray, L-21416, Dec. 31 , 196>5, 15 SCRA 695. ) WHEREFORE , respondent Commissioner of Internal Revenue is hereby ordered to grant a tax credit to petitioner Anscor Container Corporation in the amount of ~138 , 101.00 representing erroneously paid i ncome tax for 1979 . Wi thout pronouncement as to costs. SO ORDERED . Quezon City , Metro Manila, May 30, 1985 . cLln~~� ~~ / AMANTE ILLER ( . / Presidi g Judge WE CONCUR: (\ , I

Want an analysis of this document?

Ask ASG Legal AI to summarize it, compare it with other rulings, or explain how it applies to your situation — it researches from this same library.